The broad long-term goal of this research is to reduce morbidity due to arthritis by developing long-lasting injectable intra-articular drug delivery systems. Intra-articular steroids have been a mainstay of treatment for arthritis for more than 50 years. However, for many patients, multiple steroid injections are necessary. We have developed a series of steroid delivery systems that deliver steroid at therapeutic levels in the eye for as long as 3 years from a single implantation. We believe that the development of an injectable intra-articular sustained release steroid delivery formulation that releases drug over a prolonged period is readily achievable, and that this formulation will become a useful tool in the treatment of arthritis. We achieved the specific aims of Phase I of this proposal which were to formulate sustained- release suspensions for an intra-articular steroid, to test the in vitro releae characteristics of these formulations, and to test the in vivo pharmacokinetics and safety of the formulations in sheep. The specific aims of this Phase II proposal are to confirm efficacy in an animal model of synovial inflammatory disease; to determine the minimum dose required using a dose ranging efficacy study; to manufacture a lead formulation under sufficient Good Manufacturing Procedures (GMP) to permit Phase 1 clinical studies under an Investigational New Drug (IND) Exemption; and to contract pre-clinical GLP animal studies in sheep to support the IND. The milestone for the successful completion of Phase II work is the demonstration of efficacy in the rat model and safety of our target dose in sheep. In Phase IIb of this grant we wil complete necessary pre- clinical studies and submit an IND to the FDA. We have experience in all aspects of the drug development process from laboratory expertise, to regulatory experience, to a history of partnerships with two corporate partners leading to two NDAs. Because the technology is sound, the preliminary data are supportive, the development strategy is straightforward, and because we have done this before, we are confident that the probability of success is high. We believe that the resulting product can compete effectively in the niche market currently occupied by the viscosupplements.